Powers of Attorney Law: Bankers Beware: New Powers of Attorney Law in NSW Has Significant Implications for Bankers and Financiers

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A power of attorney is a legal document that allows a person (known as the "principal") to appoint another trusted person(s) (known as the "attorney") to attend to important financial and property matters on the principal's behalf.

A general power of attorney allows the attorney to do anything the principal could lawfully authorise an attorney to do. An enduring power of attorney is one that is signed by the principal with the intention that it will continue to operaLe, even if the principal should suffer a loss of mental capacity after the document has been signed.

Background

The Powers of Attorney Act 2003, is mainly aimed at remedying problems with enduring powers of attorney--especially misuse of such powers by unscrupulous attorneys.

The Act has resulted in a new prescribed form of power of attorney and major changes in the law and practice relating to general and enduring powers.

The Act largely re-writes NSW statute law on powers of attorney, although general law principles will also apply. The Act will affect commerce and finance because powers of attorney are now likely to contain much tighter restrictions on benefits to attorneys and third parties, as well as …